Rural towns feel chill of shutdowns: Maytag's exit in Galesburg shows globalization's ills

Chicago Tribune ^ | September 1, 2003 | James P. Miller

[sarcasm]

GALESBURG, Ill. -- More than a year remains before Maytag Corp. finally pulls the plug on its 1,600-worker refrigerator factory here.

But already, economic shock waves from the planned shutdown have begun to ripple outward from this prairie town, killing the jobs of hundreds of non-Maytag workers and threatening to claim as many as 2,000 more, including nurses, postal workers, mechanics and schoolteachers whose work has no connection with the appliance maker.

For decades, growth-minded rural towns have vied to attract manufacturers by offering tax breaks and other incentives. The expansion strategy is based on what economists call the "multiplier effect": When a new employer comes to town, the influx of new payroll money creates jobs throughout the local economy, as workers begin buying new homes, cars, and other goods and services.

Now, with manufacturers closing U.S. plants and switching production to cheap-labor sites in Mexico and China, the multiplier is working in reverse. The attribute that has long made manufacturing so attractive to communities--its ability to spark an outsize number of new jobs--is magnifying the economic disruption caused by manufacturer pullouts.

[BooBoo1000]

It would be interesting to see what actions the Union Workers have taken to keep their jobs in Galesburg. I cannot belive the workers just found out about this closing.

[sarcasm]

Should they offer to reduce their pay to $ 5.00/day?

[DugwayDuke]

"Should they offer to reduce their pay to $ 5.00/day?"

Of course not. What they need to do is to enact tariffs driving the cost of refrigerators to a level that will support their current wages. I'm sure their neighbors will be happy to pay much more for their refrigerators to save these union jobs. Of course, the increase in costs will mean can't pay for other things, but, after all, using the power of government to extort money from your neighbor is the American way, is it not?

[sarcasm]

Let me know when Maytag reduces their prices.

[baltodog]

I didn't read the whole article because I do not feel like registering with the Chicago Tribune.
Were these, in fact, union jobs?
Not that it really matters, now.
It's not just white collar jobs leaving.

[Balto_Boy]

Kenmore and Frigidaire still manufacture washers and dryers in the U.S. Anyone else?

[Drango]

I'm sure their neighbors will be happy to pay much more for their refrigerators to save these union jobs.

I also want to pay more for steel and wood. Not to mention shoes, TV's, peanuts, sugar, and carbon fiber. In fact, let's protect everything...

[RipSawyer]

"I also want to pay more for steel and wood. Not to mention shoes, TV's, peanuts, sugar, and carbon fiber. In fact, let's protect everything..."

You will soon get your wish, wages are in a general downtrend so the effect will be the same as price increases, you will have to work more hours to buy the same product. If you have not had your wage cut yet, be patient, it will be coming to a factory near you soon.

[BenLurkin]

ping

[DugwayDuke]

Enact tariffs on all imported goods and I can assure you, the prices on all goods covered by the tariffs will go up. That is the point, isn't it? Increase the price to protect jobs and wages?

[Bill Davis FR]

bump for the continuing export of jobs...

[sarcasm]

When is Maytag going to reduce prices to reflect the lower cost of labor in their Mexican plant?

[FITZ]

Should they offer to reduce their pay to $ 5.00/day?

Obviously they should because that's the only way they're going to compete with Mexicans which have a $4.50 minimum pay. Give up health care benefits too.

[VadeRetro]

One up your alley.

[Walkin Man]

Oh yeah, I'm sure Maytag will cut their prices by two thirds when their products are made overseas by people living in cardboard boxes in Mexico and slave labor in Red China! HA HA HA!

[FITZ]

the prices on all goods covered by the tariffs will go up

They don't go down when they export the jobs. There should be a tax on all products made outside of the US to make up the difference that American businessmen are forced to pay in taxes, regulation compliance, Workers Comp, Social Security and the rest that make doing business here too costly.

[Redleg Duke]

Oh, the typical actions of the big unions. Antagonize management. Thuggery. Strikes. Demands for job security. Featherbedding.

[Balto_Boy]

Obviously they should because that's the only way they're going to compete with Mexicans which have a $4.50 minimum pay. Give up health care benefits too.

So who, with Mexicans making 4.50 an hour and paying for their own health care, and Americans out of work, is going to buy these products?

[sarcasm]

The remaining taxpayers will pay for their health care when they go on Medicaid.